Accident Care Specialists of Portand, Inc. v. Allstate Fire & Cas. Ins. Co.
| Decision Date | 16 June 2014 |
| Docket Number | No. 3:11-cv-01033-MO,No. 3:13-cv-00408-MO,3:11-cv-01033-MO,3:13-cv-00408-MO |
| Parties | ACCIDENT CARE SPECIALISTS OF PORTAND, INC., an Oregon Corporation, Plaintiff, v. ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY, an Illinois Corporation, Defendants. ALLSTATE INSURANCE COMPANY, ALLSTATE FIRE AND CASUALTY INSURANCE COMPANY, ALLSTATE INDEMNITY COMPANY, ALLSTATE PROPERTY AND CASUALTY INSURANCE COMPANY, an Illinois Corporation, Counterclaim Plaintiff, v. ALEXIS LEE, D.C., and GEORGE CLUEN, D.C., Counterclaim Defendants. |
| Court | U.S. District Court — District of Oregon |
Counterclaim Defendants Accident Care Specialists, Dr. Alexis Lee, and Dr. George Cluen have sought attorney's fees as prevailing parties under both the Oregon Unfair Trade Practices Act ("UTPA") and Oregon Racketeer Influenced and Corrupt Organizations Act ("ORICO"). All counterclaim Defendants are prevailing parties on these claims, because I GRANTED [197]1 counterclaim Defendants' motions for summary judgment on Allstate's counterclaims for violations of the UTPA and ORICO. On April 29, 2014, I DENIED Accident Care's motion for attorney fees [212] in full and GRANTED Drs. Lee and Cluen's motions for attorney fees [202, 213] under ORICO only. (Order [235].) I write to briefly explain my rulings.
Attorney fees are only available under the UTPA if "if the court finds that an objectively reasonable basis for bringing the action . . . did not exist." Or. Rev. Stat. § 646.638(3). Thus, I have discretion to award attorney fees under the UTPA only if I find that Allstate lacked an "objectively reasonable basis" for bringing the claims.
A prevailing party to a private ORICO action, whether plaintiff or defendant, may recover its attorney fees. Or. Rev. Stat. § 166.725(14). Thus, I have discretion to award the prevailing counterclaim Defendants their reasonable attorney fees.
Or. Rev. Stat. § 20.075 governs the award of attorney fees where they are authorized at the discretion of the court. There are eight factors the court is to consider in determining whether fees are warranted:
Or. Rev. Stat. § 20.075(1)(a)-(h). If the court determines that an award of fees is warranted under these factors, additional factors are to be considered in determining the amount of the award. Or. Rev. Stat. § 20.075(2). The additional factors to be considered are as follows:
As noted above, I DENIED Accident Care's motion for attorney fees [212] and GRANTED attorney fees to Drs. Lee [202] and Cluen [213] under ORICO only. As will be discussed below, I do not find that Allstate's UTPA claim lacked an objectively reasonable basis, and thus no award of attorney fees is warranted on the UTPA claim.
Accident Care moved for attorney fees, stating that counsel has spent "approximately 808 hours litigating this matter on issues that intertwined and have necessarily involved the defense of [Accident Care] on Allstate's allegations . . . against [Accident Care]." (Mem. in Support [212-1] at 2.) Accident Care seeks a total of $310,137.25 in attorney fees in compensation for all hours worked by counsel and staff between April of 2011—when Accident Care first began to pursue its claims in chief in state court—and the summary judgment rulings in January of 2014. Id. at 2-3.
Allstate's counterclaims against Accident Care were not filed until March of 2013. Accident Care provides no justification for any entitlement to attorney fees incurred while pursuing its own case, beginning nearly two years before Allstate filed any counterclaims.
Even if some work done before the counterclaims were filed could be explained as reasonably necessary to their defense—for instance, defending the deposition of one of the witnesses on whose testimony Allstate based its allegations—it is impossible to identify any such hours here. Accident Care has failed to explain the nature of the work done during a single one of the hours claimed. Counsel's declaration simply states that counsel James Shadduck has worked a total of 808 hours at a billing rate of $350.00 per hour, paralegal Angie Milligan has worked 140.75 hours at a billing rate of $175.00 an hour, and legal assistant Heather Weatherellhas worked 46.75 hours at a billing rate of $75.00 an hour. (Decl. Shadduck [212-2] at 2-3.) It is impossible for this court to determine which hours were actually spent defending against the counterclaims and which were spent on Accident Care's own claims. It is also impossible for this court to determine when any particular hour of work took place, so hours cannot be identified as either preceding or following the filing of the counterclaims. Finally, it is impossible for this court to determine whether any particular hour represents work reasonably and necessarily undertaken in defending against the ORICO or UTPA counterclaim, as opposed to the common law counterclaims for which attorney fees are unavailable.
Or. Rev. Stat. § 20.075(1)(h) directs me to consider, in determining whether to award discretionary attorney fees, "[s]uch . . . factors as the court may consider appropriate under the circumstances of the case." The failure to adequately document hours is such a factor. Accident Care has provided no information on which I may base my decision whether to award attorney fees and what the reasonable amount of such fees would be. The recitation of the bare number of hours worked is insufficient to allow me to determine what amount of fees was reasonably incurred in defending against either the ORICO or UTPA counterclaim. Consequently, I DENIED Accident Care's motion [212]. I make no finding as to the reasonableness of the hourly rate sought for counsel and staff.
I GRANTED Counterclaim Defendant Dr. Lee's motion for attorney fees [202] and Dr. Cluen's motion for attorney fees [213] under ORICO. I conclude that Allstate's UTPA claim was not without an objectively reasonable basis, however, and thus attorney fees may not be awarded under Or. Rev. Stat. § 646.638(3). I thus DENY the motion as to the UTPA claim.
Allstate urges the Court to deny the request for attorney fees under the UTPA, arguing that the denial of Accident Care's Federal Rule of Civil Procedure 11 ("Rule 11") motion for sanctions establishes as a matter of law that its claims had an objectively reasonable basis. (Allstate Resp. [217] at 9.)
This argument reads too much into my ruling on the Rule 11 motion. After the close of discovery, Accident Care had filed a request for sanctions under Rule 11 as to Allstate's counterclaims. (Mot. for Sanctions [139].) I took this motion up at the summary judgment hearing. I explained that "although I'm inclined to grant summary judgment on some of these counterclaims, it's not in my view at all appropriate to impose any Rule 11 sanctions for bringing them." (Hearing Tr. [201] at 15:14-20.) I concluded that the claims were not "so without merit as to violate Rule 11." Id.
Rule 11's standard for the imposition of sanctions is separate from the Oregon statutory standard of "objectively reasonable basis." To conclude that a court's declination to impose sanctions under Rule 11 is a finding, as a matter of law, that the claims have an "objectively reasonable basis" under Or. Rev. Stat. § 646.638(3) would conflate the two inquiries. It is in the court's discretion to impose sanctions under Rule 11(c). That I declined to do so here does not establish that the claims met the standards under the UTPA. Nevertheless, I find that Allstate's UTPA counterclaim did not lack an objectively reasonable basis.
Dr. Lee argues that Allstate could have had no objectively reasonable basis for filing the UTPA counterclaim because the claim was already barred by the UTPA's one-year statute oflimitations by the time it was filed. (Lee Mem. [203] at 6-7.)2 The complaint alleged conduct occurring from October 2008 to 2011, but Allstate did not file the counterclaims until March of 2013. Thus, Dr. Lee argues, it was or should have been clear to Allstate that the UTPA claim was time-barred. Id. ...
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